MTF Calculator

MTF Calculator

In the capital intensive world of trading, leveraging tools like the MTF Calculator can significantly enhance the investment decisions and boost potential returns.

Margin Trading Facility (MTF) allows you to borrow money from stock brokers to increase your buying power to purchase more stocks than what you could with just your own funds. On FYERS, you could use MTF facility for 900 stocks.

MTF helps in taking advantage of opportunities despite a shortage of funds. To understand potential returns, you can use the Margin Trading Facility (MTF) Calculator. Let’s dive into the details of calculating returns, using the FYERS MTF Calculator, and the benefits MTF offers to traders like you.

What is a MTF Calculator?

A MTF Calculator, or Margin Trading Facility Calculator, shows how much you can borrow to trade stocks and the margin you need. It helps you see your buying power with the funds you have.

How to Use FYERS MTF Calculator Online?

Using FYERS MTF Calculator, you can estimate your potential returns with margin trading. To use the calculator, follow these steps:

• Once you're on the MTF Calculator tab enter the preferred 'Stock Name' and 'Stock Price' (the current market price should auto-fill).

• Input amount of funds in 'Your Fund' and investment duration in 'Tenure' (in number of days).

• Specify the return percentage that you are expecting on that particular stock in the 'Expected Return' field.

The calculator will then display the stock's leverage and the amount of funding provided by FYERS. It will also show the MTF interest rate, the interest amount to be paid, and the total funds required for the transaction. Additionally, the expected returns with MTF will be displayed. 

Understanding MTF with an Example

Suppose Rahul has ₹1,00,000 and wants to invest in Tata Power. On FYERS, Rahul can get a 4x leverage, which means he gets an additional ₹4,00,000 for his investment. The total investment available at his end would now be ₹5,00,000.

If the stock rises by 10% over 30 days, the profit on this total investment would be ₹50,000. After ₹5,260.27 in MTF charges for 30 days on a ₹4,00,000 loan at 16% annual interest, Rahul will take home ₹44,739.72.

On the contrary, if Rahul used only his own funds, the profit would have been only ₹10,000.

Benefits of Margin Trading

• Increased Buying Power: MTF allows you to buy more stocks than you could with just your own funds, potentially increasing your market exposure and opportunities for profit.

• Boosts Returns: By leveraging borrowed funds, you can enhance your returns if your investments perform well.

• Flexibility: MTF provides the flexibility to take advantage of market opportunities more quickly. You can act on short-term opportunities without having to wait to accumulate additional capital.

• Potential for Short-term Gains: Leveraging funds can be beneficial for short-term trading strategies where quick, significant gains are possible. MTF can help you capitalize on these opportunities.

• Efficient Use of Capital: By borrowing funds, you can keep more of your own capital available for other investments, rather than tying it up in a single trade.

However, it's important to note that while MTF offers these benefits, it also comes with risks, including the potential for increased losses and margin calls.

Conclusion

MTF enhances your buying power and market exposure, offering the potential for higher returns while maintaining capital flexibility. With the FYERS MTF Calculator, you can evaluate the financial impact of margin trading, enabling you to make well-informed decisions while optimizing your investment strategy.